Some govs say Medicaid growth could hammer budgets

Any public policy discussions about Medicaid financing has real-world implications for some of the customers of Waymon Tigrett's family's store, Brandon Discount Drugs, in Brandon, Miss. photographed on Tuesday, Sept. 8, 2009. Tigrett, a pharmacist for over 40 years, said as Mississippi lawmakers have finished the state budget the past several years, unfounded rumors have spread that hospitals were turning away Medicaid patients, or that pharmacies were reducing the number of prescriptions they'd fill for people on the program. Rumors that cause much stress among the elderly and poor, he says. (AP Photo/Rogelio V. Solis)
— AP

Any public policy discussions about Medicaid financing has real-world implications for some of the customers of Waymon Tigrett's family's store, Brandon Discount Drugs, in Brandon, Miss. photographed on Tuesday, Sept. 8, 2009. Tigrett, a pharmacist for over 40 years, said as Mississippi lawmakers have finished the state budget the past several years, unfounded rumors have spread that hospitals were turning away Medicaid patients, or that pharmacies were reducing the number of prescriptions they'd fill for people on the program. Rumors that cause much stress among the elderly and poor, he says. (AP Photo/Rogelio V. Solis)
/ AP

JACKSON, Miss. 
States with high levels of poverty and unemployment have been struggling with growing Medicaid budgets during the recession, and some governors worry their financial burdens could get worse as Congress works on a comprehensive health care bill.

They're especially worried about possible expansion of Medicaid, the federal-state health insurance program for the needy and disabled.

"If the federal government wants to expand health care to everybody in the country, they should not force the states to pay part of the bill. If they want to do that, the federal government should pay for it," said Mississippi Gov. Haley Barbour, who is chairman of the Republican Governors Association.

Democratic U.S. Sen. Max Baucus of Montana is part of a bipartisan group of Finance Committee members – the so-called Gang of Six – grappling with health care legislation. Part of Baucus' proposal would expand Medicaid to cover more low-income people. For example, childless adults making up to 133 percent of the federal poverty level would be eligible for the first time, starting in 2014. Under current standards, the federal poverty level is $10,830 for an individual.

A House bill has a similar provision to expand coverage. Under current rules, adults who are not disabled and do not have children cannot be covered by Medicaid, regardless of how poor they are.

Baucus said his staff is trying to schedule a conference call with governors for Tuesday.

Montana Gov. Brian Schweitzer, chairman of the Democratic Governors Association, said in July that he worried the federal government's push to expand Medicaid might force states to borrow money to pay for new health expenses.

Since then, Schweitzer said he has spoken to President Barack Obama and Democratic congressional leaders and has been assured that the final version of health care legislation won't include unfunded mandates for the states.

"I think everybody has looked at each other and said, 'That dog don't hunt,'" Schweitzer said in late August.

Across the country, Medicaid budgets are already strained, especially in states with higher than average poverty and unemployment rates:

– In New Mexico, 18.4 percent live below the poverty level, well above the national average of 13.3 percent. Medicaid enrollment there has increased nearly 10 percent since mid-2008, and Human Services Secretary Pam Hyde said the program could overspend its budget by $35 million to $40 million this fiscal year.

– In Michigan, where unemployment hit 15 percent in July, Republicans who control the state Senate propose saving money by trimming 8 percent from the Medicaid reimbursement rates for physicians, hospitals and other health care providers in the state fiscal year that begins Oct. 1.

– In Georgia, Republican Gov. Sonny Perdue ordered 3 percent funding cuts for Medicaid and public schools and 5 percent cuts for most other state programs because of weak state tax collections in late July, just three weeks into the new fiscal year.

"If we're asked to pick up on state increased costs in health care, it's going to take away from infrastructure, it's going take away from environment, transportation, education, public safety – all the other things that we as states do," said Perdue, who leads a state where 14.5 percent of residents live below the poverty level, according to the U.S. Census.